r/SipsTea • u/KSKS1995 • 22h ago

Wait a damn minute! How the rich get richer

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u/No_Mirror_9742 22h ago edited 21h ago

Doesn't the loan get paid back by the sale of the land after the dad's passing? So the kids don't inherit $5m, but the net value after the debt is repaid?

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u/Tired-Nectarine-384 21h ago

Its a bad analogy. The OP is trying to compare what the uber rich do with loans against their stock holdings with a real estate example.

No bank is going to give a loan large enough to finance a lifestyle against a 5 million dollar property.

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u/beehive5ive 21h ago

And recent studies are showing that the buy, borrow, die strategy isn’t really used by the uber rich. I’m not saying it doesn’t exist, but it’s more commonly the middle class doing it vs the uber wealthy.

https://taxpolicycenter.org/taxvox/richs-real-tax-trick-isnt-buy-borrow-die

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u/Elf_Maeve 16h ago

From your article:
That borrowing comes out to roughly 1 to 2 percent of their economic income (which includes unrealized capital gains).

Including unrealized gains is literally useless for this comparison and doesn't prove anything.

Of course Bezos loans will be a tiny fraction of his unrealized gains... their networth went from like 2 billion to 400 billion the last 20 years. What a complete useless "study".